STAMFORD, Conn., Feb. 16,
2017 /PRNewswire/ -- Charter Communications, Inc. (formerly
known as CCH I, LLC, along with its subsidiaries, the "Company" or
"Charter") today reported financial and operating results for the
three and twelve months ended December 31, 2016. On
May 18, 2016, Charter completed its
transactions between the Company, Time Warner Cable Inc. ("Legacy
TWC") and Charter Communications, Inc. ("Legacy Charter"), and
Legacy Charter and Bright House Networks, LLC ("Legacy Bright
House") (collectively, the "Transactions"). In this release, actual
results reflect the operations of Legacy Charter for the year ended
December 31, 2016 and Legacy TWC and Legacy Bright House for
the period from May 18, 2016 through
December 31, 2016. Pro forma1 results
give effect to the Transactions as if they had closed at the
beginning of the earliest period presented and include the
operations of Legacy Charter, Legacy TWC and Legacy Bright House
for the full year ended December 31, 2016 and three and twelve
months ended December 31, 2015.
Key highlights:
- As of December 31, 2016, Charter's network passed 49.2
million homes and businesses, and served 26.2 million residential
and small and medium business ("SMB") customers.
- In the fourth quarter, Charter launched its high value
Spectrum pricing, packaging and brand to residences in
additional Legacy TWC markets, including New York City, and in all Legacy Bright House
markets. As of December 31, 2016,
Spectrum had been introduced in approximately 50% of the
combined Legacy TWC and Legacy Bright House footprints, with the
roll-out to remaining Legacy TWC markets expected to be largely
complete by the end of the first quarter of 2017.
- During the fourth quarter, total customer relationships
increased 287,000, compared to 394,000 on a pro forma basis
during the fourth quarter of 2015. During the fourth quarter, total
residential and SMB primary service units ("PSUs") increased
by 418,000, compared to 981,000 on a pro forma basis during
the fourth quarter of 2015. The year-over-year decline in customer
relationship and PSU net additions was primarily driven by elevated
churn on historical products in Legacy TWC markets.
- Fourth quarter revenues of $10.3
billion grew 7.2% on a pro forma basis, as compared
to the prior year period, driven by residential revenue growth of
6.0% and commercial revenue growth of 11.8%. On an actual basis,
fourth quarter revenue grew 309.0% year-over-year, driven primarily
by the Transactions.
- Fourth quarter Adjusted EBITDA2 of $3.9 billion grew 12.7% year-over-year on a
pro forma basis. On an actual basis, fourth quarter Adjusted
EBITDA grew by 324.3%, driven primarily by the Transactions.
- Net income attributable to Charter shareholders totaled
$454 million in the fourth quarter,
compared to $130 million on a pro
forma basis during the same period last year, driven by higher
income from operations primarily as a result of an increase in
Adjusted EBITDA and a $366 million
pension revaluation gain. On an actual basis, net income totaled
$454 million, compared to a net loss
of $122 million during the fourth
quarter of 2015, driven by higher income from operations following
the close of the Transactions, partially offset by higher interest
and tax expense.
- On a pro forma basis, total customer relationships grew
by 1,154,000 or 4.6% for the twelve months ended December 31,
2016. Total residential and SMB PSUs grew by 1,896,000, or 3.9% on
a pro forma basis, for the twelve months ended
December 31, 2016.
- For the full year 2016, pro forma revenues increased
7.0% and pro forma Adjusted EBITDA rose 11.2%. Excluding
transition costs, full year 2016 pro forma Adjusted EBITDA
increased 11.8%. On an actual basis, full year 2016 revenues
increased 197.3% and Adjusted EBITDA grew by 211.0%, driven
primarily by the Transactions.
- For the year ended December 31, 2016, pro forma net
income attributable to Charter shareholders totaled $1.1 billion, compared to $159 million in 2015. The year-over-year increase
in pro forma net income was primarily related to higher
Adjusted EBITDA. On an actual basis, net income attributable to
Charter shareholders totaled $3.5
billion for the year ended December 31, 2016, compared
to a net loss of $271 million in
2015. The increase in net income was primarily related to a
$3.3 billion tax benefit resulting
from a reduction in Legacy Charter's preexisting valuation
allowance on deferred tax assets and higher income from operations
as a result of the Transactions.
- Fourth quarter capital expenditures totaled $1.9 billion, and excluding transition capital,
fourth quarter capital expenditures totaled $1.7 billion. For the year ended
December 31, 2016, pro forma capital expenditures
totaled $7.5 billion, and excluding
transition capital, full year 2016 capital expenditures totaled
$7.1 billion. Actual capital
expenditures totaled $5.3 billion for
the year ended December 31, 2016.
1
|
See Exhibit 99.1 in
the Company's Quarterly Report on Form 10-Q for the three and nine
months ended September 30, 2016 filed with the Securities and
Exchange Commission on November 3, 2016, which includes
reconciliations of the pro forma information to actual information
for each quarter of 2015 and the first and second quarters of 2016.
See the "Use of Adjusted EBITDA, Free Cash Flow and Pro Forma
Information" section of this document for additional
information.
|
2
|
Adjusted EBITDA and
free cash flow are defined in the "Use of Adjusted EBITDA, Free
Cash Flow and Pro Forma Information" section and are reconciled to
consolidated net income (loss) and net cash flows from operating
activities, respectively, in the addendum of this news
release.
|
"Since the close of our transactions in May, we have been
managing the complicated process of integrating three different
companies with over 26 million customers and 90 thousand employees.
Despite the complexity, our integration is going well. We also
continued to grow in 2016, with pro forma customer growth of
nearly 5%, revenue growth of 7%, and double digit Adjusted EBITDA
growth," said Tom Rutledge, Chairman
and CEO of Charter Communications, Inc. "In 2017, we remain focused
on applying our growth-oriented operating strategy across our new
footprints, driving more customer satisfaction, growth, and
shareholder value."
Key Operating Results
|
Approximate as
of
|
|
|
|
Actual
|
|
Pro
Forma
|
|
|
|
December 31,
2016 (a)
|
|
December 31,
2015 (a)
|
|
Y/Y
Change
|
Footprint
(b)
|
|
|
|
|
|
Estimated Video
Passings
|
49,229
|
|
48,375
|
|
1.8 %
|
Estimated Internet
Passings
|
48,955
|
|
48,019
|
|
1.9 %
|
Estimated Voice
Passings
|
48,142
|
|
47,164
|
|
2.1 %
|
|
|
|
|
|
|
Penetration
Statistics (c)
|
|
|
|
|
|
Video Penetration of
Estimated Video Passings
|
35.0 %
|
|
36.0 %
|
|
(1.0)
ppts
|
Internet Penetration of
Estimated Internet Passings
|
46.2 %
|
|
43.7 %
|
|
2.5
ppts
|
Voice Penetration of
Estimated Voice Passings
|
23.1 %
|
|
22.5 %
|
|
0.6
ppts
|
|
|
|
|
|
|
Customer
Relationships (d)
|
|
|
|
|
|
Residential
|
24,801
|
|
23,795
|
|
4.2 %
|
Small and Medium
Business
|
1,404
|
|
1,256
|
|
11.8 %
|
Total Customer
Relationships
|
26,205
|
|
25,051
|
|
4.6 %
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
Primary Service
Units ("PSUs")
|
|
|
|
|
|
Video
|
16,836
|
|
17,062
|
|
(1.3)%
|
Internet
|
21,374
|
|
19,911
|
|
7.4 %
|
Voice
|
10,327
|
|
9,959
|
|
3.7 %
|
|
48,537
|
|
46,932
|
|
3.4 %
|
|
|
|
|
|
|
Quarterly Net
Additions/(Losses)
|
|
|
|
|
|
Video
|
(51)
|
|
118
|
|
NM
|
Internet
|
357
|
|
495
|
|
(27.9)%
|
Voice
|
39
|
|
304
|
|
(87.2)%
|
|
345
|
|
917
|
|
(62.4)%
|
|
|
|
|
|
|
Single Play
(e)
|
9,640
|
|
8,883
|
|
8.5 %
|
Double Play
(e)
|
6,586
|
|
6,687
|
|
(1.5)%
|
Triple Play
(e)
|
8,575
|
|
8,225
|
|
4.3 %
|
|
|
|
|
|
|
Single Play
Penetration (f)
|
38.9 %
|
|
37.3 %
|
|
1.6
ppts
|
Double Play
Penetration (f)
|
26.6 %
|
|
28.1 %
|
|
(1.5)
ppts
|
Triple Play
Penetration (f)
|
34.6 %
|
|
34.6 %
|
|
--
ppts
|
|
|
|
|
|
|
% Residential
Non-Video Customer Relationships
|
32.1 %
|
|
28.3 %
|
|
3.8
ppts
|
|
|
|
|
|
|
Monthly Residential
Revenue per Residential Customer (g)
|
$109.77
|
|
$108.22
|
|
1.4 %
|
|
|
|
|
|
|
Small and Medium
Business
|
|
|
|
|
|
PSUs
|
|
|
|
|
|
Video
|
400
|
|
361
|
|
10.8 %
|
Internet
|
1,219
|
|
1,078
|
|
13.1 %
|
Voice
|
778
|
|
667
|
|
16.6 %
|
|
2,397
|
|
2,106
|
|
13.8 %
|
|
|
|
|
|
|
Quarterly Net
Additions/(Losses)
|
|
|
|
|
|
Video
|
12
|
|
7
|
|
71.4 %
|
Internet
|
34
|
|
33
|
|
3.0 %
|
Voice
|
27
|
|
24
|
|
12.5 %
|
|
73
|
|
64
|
|
14.1 %
|
|
|
|
|
|
|
Monthly Small and
Medium Business Revenue per Customer (h)
|
$214.25
|
|
$212.26
|
|
0.9 %
|
|
|
|
|
|
|
Enterprise PSUs
(i)
|
|
|
|
|
|
Enterprise
PSUs
|
97
|
|
81
|
|
19.8 %
|
|
Footnotes
|
In thousands, except
per customer and penetration data. See footnotes to unaudited
summary of operating statistics on page 6 of the addendum of this
news release. The footnotes contain important disclosures regarding
the definitions used for these operating statistics.
|
NM - Not
meaningful
|
All percentages are
calculated using whole numbers. Minor differences may exist due to
rounding.
|
In November, Charter continued introducing its Spectrum
brand, and residential pricing and packaging in additional Legacy
TWC markets, including New York
City, as well as in all Legacy Bright House markets.
Spectrum is an industry-leading suite of video, Internet,
and voice services that includes over 200 HD channels, minimum
offered Internet speeds of at least 60 Mbps, and a fully featured
voice service, delivered at a highly competitive price. As of the
end of the fourth quarter of 2016, 94% of Legacy Charter's
residential customers received Charter Spectrum products.
Charter will complete the launch of Spectrum to residences
in the majority of remaining Legacy TWC markets in the first
quarter of 2017. In the fourth quarter, Spectrum Enterprise
launched new pricing and packaging to the enterprise marketplace,
and during the second quarter of 2017, Charter will launch
Spectrum pricing and packaging for small and medium
businesses in Legacy TWC and Legacy Bright House markets.
In the second quarter of 2017, Charter will also restart
all-digital efforts in the approximately 40% of Legacy TWC's
footprint and 60% of Legacy Bright House's footprint that are not
yet all-digital. All-digital allows Charter to offer more advanced
products and services, and provides residential customers with
two-way digital set-tops, which offer better picture quality, an
interactive programming guide and video on demand on all TV outlets
in the home. Charter intends to complete the all-digital conversion
in Legacy TWC and Legacy Bright House markets in less than 2 years,
with a minimum Internet speed offering of 100 Mbps in many markets.
As of the end of the fourth quarter of 2016, Legacy Charter's
footprint was 100% all-digital.
During the fourth quarter of 2016, Charter's residential
customer relationships grew by 250,000, versus 359,000 in the prior
year period.1 Residential PSUs increased by 345,000
versus a gain of 917,000 in the prior year period. The
year-over-year decline in customer relationship and PSU net
additions was primarily the result of elevated churn from Legacy
TWC historical pricing and packaging. As of December 31, 2016,
Charter had 24.8 million residential customer relationships and
48.5 million residential PSUs.
Residential video customers decreased by 51,000 in the fourth
quarter of 2016, versus an increase of 118,000 in the year-ago
period, driven primarily by higher year-over-year video losses at
Legacy TWC. Over the last twelve months, Legacy Charter grew
residential video customers by 42,000 or 1.0%. As of
December 31, 2016, Charter had 16.8 million residential video
customers.
Charter added 357,000 residential Internet customers in the
fourth quarter of 2016, compared to 495,000 a year ago. As of
December 31, 2016, over 90% of Legacy Charter's residential
Internet customers subscribed to tiers that provided speeds of 60
Mbps or more compared to 36% at Legacy TWC and 71% at Legacy Bright
House. The Company continues to see strong demand for its Internet
service as consumers value the speed and reliability of Charter's
Internet offering. As of December 31, 2016, Charter had 21.4
million residential Internet customers.
During the fourth quarter, the Company added 39,000 residential
voice customers, versus 304,000 during the fourth quarter of 2015.
The year-over-year decline in voice net additions was primarily
driven by a Legacy TWC voice promotion that drove voice net
additions in the fourth quarter of 2015. As of December 31,
2016, Charter had 10.3 million residential voice customers.
Fourth quarter residential revenue per customer relationship was
$109.77, and grew by 1.4% as compared
to the prior year period, driven by promotional rate step-ups and
rate adjustments, partially offset by continued single play
Internet sell-in.
During the fourth quarter of 2016, SMB customer relationships
grew by 37,000, versus customer growth of 35,000 during the fourth
quarter of 2015. SMB PSUs increased 73,000, compared to 64,000
during the fourth quarter of 2015. As of December 31, 2016,
Charter had 1.4 million SMB customer relationships and 2.4 million
SMB PSUs.
1
|
All customer data
referred to herein for periods prior to the third quarter of 2016,
are pro forma for the Transactions as if they had closed at
the beginning of the earliest period presented.
|
Fourth Quarter Financial Results
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
(dollars in
millions, except per share data)
|
|
|
Three Months Ended
December 31,
|
|
2016
|
|
2015
|
|
|
|
2015
|
|
|
|
Actual
|
|
Pro
Forma
|
|
%
Change
|
|
Actual
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
Video
|
$ 4,098
|
|
$
4,020
|
|
1.9 %
|
|
$ 1,167
|
|
251.2 %
|
Internet
|
3,312
|
|
2,924
|
|
13.3 %
|
|
781
|
|
324.2 %
|
Voice
|
719
|
|
722
|
|
(0.5)%
|
|
135
|
|
431.6 %
|
Residential
revenue
|
8,129
|
|
7,666
|
|
6.0 %
|
|
2,083
|
|
290.3 %
|
Small and medium
business
|
891
|
|
789
|
|
13.0 %
|
|
199
|
|
348.7 %
|
Enterprise
|
526
|
|
479
|
|
9.8 %
|
|
95
|
|
451.5 %
|
Commercial
revenue
|
1,417
|
|
1,268
|
|
11.8 %
|
|
294
|
|
382.1 %
|
Advertising
sales
|
506
|
|
419
|
|
20.8 %
|
|
87
|
|
482.9 %
|
Other
|
223
|
|
228
|
|
(2.2)%
|
|
48
|
|
362.4 %
|
Total
Revenue
|
10,275
|
|
9,581
|
|
7.2 %
|
|
2,512
|
|
309.0 %
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
6,422
|
|
6,163
|
|
4.2 %
|
|
1,604
|
|
300.4 %
|
Adjusted
EBITDA
|
$ 3,853
|
|
$
3,418
|
|
12.7 %
|
|
$
908
|
|
324.3 %
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
37.5
%
|
|
35.7
%
|
|
|
|
36.2
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
$ 1,888
|
|
$
1,831
|
|
|
|
$
548
|
|
|
% Total
Revenues
|
18.4 %
|
|
19.1 %
|
|
|
|
21.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Charter shareholders
|
$
454
|
|
$
130
|
|
|
|
$
(122)
|
|
|
Earnings (loss) per
common share attributable to Charter shareholders:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
1.69
|
|
$
0.48
|
|
|
|
$ (1.21)
|
|
|
Diluted
|
$
1.67
|
|
$
0.48
|
|
|
|
$ (1.21)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from
operating activities
|
$ 3,226
|
|
|
|
|
|
$
611
|
|
|
Free cash
flow
|
$ 1,855
|
|
|
|
|
|
$
80
|
|
|
Revenue
On a pro forma basis, fourth quarter revenues rose 7.2%
year-over-year to $10.3 billion,
driven primarily by growth in Internet, commercial, advertising and
video revenues. On an actual basis, fourth quarter revenue
increased 309.0% year-over-year, driven by the Transactions.
Video revenues totaled $4.1
billion in the fourth quarter, an increase of 1.9% on a
pro forma basis compared to the prior year period. Pro
forma video revenue growth was driven by annual and promotional
rate adjustments and higher advanced services penetration. On an
actual basis, fourth quarter video revenues increased by 251.2%
compared to the prior year period, driven by the Transactions.
On a pro forma basis, Internet revenues grew 13.3%,
compared to the year-ago quarter, to $3.3
billion, driven by an increase of 1,463,000 Internet
customers during the last year, promotional rolloff and price
adjustments. On an actual basis, Internet revenues grew 324.2%
year-over-year, as a result of the Transactions.
Voice revenues totaled $719
million in the fourth quarter, a decrease of 0.5% on a
pro forma basis compared to the fourth quarter of 2015, as
promotions and value-based pricing more than offset the
addition of 368,000 voice customers over the last twelve months.
Voice revenues increased 431.6% year-over-year, on an actual basis,
driven by the Transactions.
Commercial revenues rose to $1.4
billion, an increase of 11.8% on a pro forma basis
over the prior year period, driven by SMB revenue growth of 13.0%
and enterprise revenue growth of 9.8%. On an actual basis,
commercial revenues grew 382.1% year-over-year, as a result of the
Transactions.
Fourth quarter advertising sales revenues of $506 million increased 20.8% on a pro
forma basis compared to the year-ago quarter, driven by
an increase in political advertising revenue. Advertising sales
grew 482.9% year-over-year, on an actual basis, driven by the
Transactions.
Operating Costs and Expenses
On a pro forma basis, fourth quarter total operating
costs and expenses increased by $259
million, or 4.2%, compared to the year-ago period, primarily
driven by increases in programming and other expenses. On an actual
basis, total operating costs and expenses grew by 300.4%
year-over-year as a result of the Transactions.
Fourth quarter programming expense increased by $137 million, or 6.1% on a pro forma
basis, as compared to the fourth quarter of 2015, reflecting
contractual programming increases, partly offset by Transactions
synergies.
Costs to service customers increased by $19 million or 1.0% on a pro forma basis
year-over-year, despite year-over-year residential and SMB customer
relationship growth of 4.6%, as a result of less all-digital
activity at Legacy TWC, lower service transaction volume per
customer and lower churn at Legacy Charter.
Marketing expenses decreased by $32
million, or 5.5% year-over-year, on a pro forma
basis, due to efficiencies from the consolidation of marketing
strategies following the Transactions. Other expenses grew by
$61 million, or 6.1% on a pro
forma basis, as compared to the fourth quarter of 2015,
reflecting higher advertising sales costs associated with increased
political advertising and higher enterprise sales and labor costs,
partly offset by Transactions synergies.
Adjusted EBITDA
Fourth quarter Adjusted EBITDA of $3.9
billion grew by 12.7% year-over-year on a pro forma
basis, reflecting revenue growth and operating expense growth of
7.2% and 4.2%, respectively. Excluding transition costs of
$78 million in the fourth quarter of
2016 and $22 million in the prior
year period, pro forma Adjusted EBITDA grew by 14.3%
year-over-year. On an actual basis, Adjusted EBITDA grew by 324.3%
year-over-year, due to the Transactions.
Net Income Attributable to Charter Shareholders
Net income attributable to Charter shareholders totaled
$454 million in the fourth quarter of
2016, compared to pro forma net income of $130 million in the fourth quarter of 2015. The
year-over-year increase in pro forma net income was
primarily related to higher Adjusted EBITDA, a pension revaluation
gain, and a gain on financial instruments driven by the foreign
currency remeasurement of Legacy TWC's British pound debt and
revaluation of related currency swaps, partly offset by higher
severance-related and transaction expenses, higher income tax
expense and higher depreciation and amortization. Net income per
basic common share attributable to Charter shareholders totaled
$1.69 in the fourth quarter of 2016
compared to $0.48, on a pro
forma basis, during the same period last year. The increase was
primarily the result of the factors described above, as well as a
0.5% decrease in pro forma weighted average shares
outstanding versus the prior year period.
On an actual basis, net income attributable to Charter
shareholders totaled $454 million
during the fourth quarter of 2016, compared to a net loss of
$122 million in the fourth quarter of
2015. The increase in net income was primarily related to higher
income from operations as a result of the Transactions. Actual net
income per basic common share attributable to Charter shareholders
totaled $1.69 in the fourth quarter
of 2016 compared to a net loss per basic common share of
$1.21 during the same period last
year. The increase was driven by the Transactions, partly offset by
a 165.0% increase in weighted average shares outstanding versus the
prior year period, also a result of the Transactions.
Capital Expenditures
Property, plant and equipment expenditures totaled $1.888 billion in the fourth quarter of 2016,
compared to $1.831 billion, on a
pro forma basis, during the fourth quarter of 2015. The
pro forma year-over-year increase in capital expenditures
was driven by an increase in CPE spending primarily due to higher
customer connect volumes for markets where Spectrum pricing and
packaging was recently launched and transition capital expenditures
incurred in connection with the Transactions. Transition capital
expenditures accounted for $187
million of capital expenditures in the fourth quarter of
2016 versus $49 million in the fourth
quarter of 2015. Excluding transition-related expenditures, fourth
quarter 2016 capital expenditures totaled $1.701 billion, compared to $1.782 billion, on a pro forma basis,
during the same period last year.
On an actual basis, fourth quarter 2016 capital expenditures
increased by $1.3 billion as compared
to the prior year, due to the Transactions.
Cash Flow and Free Cash Flow
During the fourth quarter of 2016, net cash flows from operating
activities totaled $3.2 billion,
compared to $611 million in the
fourth quarter of 2015. The year-over-year increase in net cash
flows from operating activities was primarily due to higher
Adjusted EBITDA and a working capital benefit, partly offset by
higher cash paid for interest in the fourth quarter of 2016 versus
the fourth quarter of 2015, following the close of the
Transactions.
Free cash flow for the fourth quarter of 2016 totaled
$1.9 billion, compared to
$80 million during the same period
last year. The increase was related to higher net cash flows from
operating activities in the fourth quarter of 2016 versus the
fourth quarter of 2015, given the close of the Transactions, partly
offset by higher capital expenditures.
Year to Date Financial Results
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
(dollars in
millions, except per share data)
|
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
Actual
|
|
Actual
|
|
%
Change
|
|
Pro
Forma
|
|
Pro
Forma
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$ 11,967
|
|
$ 4,587
|
|
160.9 %
|
|
$
16,390
|
|
$
16,029
|
|
2.3 %
|
Internet
|
9,272
|
|
3,003
|
|
208.7 %
|
|
12,688
|
|
11,295
|
|
12.3 %
|
Voice
|
2,005
|
|
539
|
|
272.2 %
|
|
2,905
|
|
2,842
|
|
2.2 %
|
Residential
revenue
|
23,244
|
|
8,129
|
|
185.9 %
|
|
31,983
|
|
30,166
|
|
6.0 %
|
Small and medium
business
|
2,480
|
|
764
|
|
224.7 %
|
|
3,409
|
|
3,009
|
|
13.3 %
|
Enterprise
|
1,429
|
|
363
|
|
293.0 %
|
|
2,025
|
|
1,818
|
|
11.4 %
|
Commercial
revenue
|
3,909
|
|
1,127
|
|
246.7 %
|
|
5,434
|
|
4,827
|
|
12.6 %
|
Advertising
sales
|
1,235
|
|
309
|
|
300.3 %
|
|
1,696
|
|
1,524
|
|
11.3 %
|
Other
|
615
|
|
189
|
|
225.0 %
|
|
910
|
|
877
|
|
4.0 %
|
Total
Revenue
|
29,003
|
|
9,754
|
|
197.3 %
|
|
40,023
|
|
37,394
|
|
7.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs
and expenses
|
18,411
|
|
6,348
|
|
190.0 %
|
|
25,559
|
|
24,390
|
|
4.8 %
|
Adjusted
EBITDA
|
$ 10,592
|
|
$ 3,406
|
|
211.0 %
|
|
$
14,464
|
|
$
13,004
|
|
11.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
36.5
%
|
|
34.9
%
|
|
|
|
36.1
%
|
|
34.8
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures
|
$
5,325
|
|
$ 1,840
|
|
|
|
$
7,545
|
|
$
6,969
|
|
|
% Total
Revenues
|
18.4 %
|
|
18.9 %
|
|
|
|
18.9 %
|
|
18.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Charter shareholders
|
$
3,522
|
|
$
(271)
|
|
|
|
$
1,070
|
|
$
159
|
|
|
Earnings (loss) per
common share attributable to Charter shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
17.05
|
|
$ (2.68)
|
|
|
|
$
3.97
|
|
$
0.59
|
|
|
Diluted
|
$
15.94
|
|
$ (2.68)
|
|
|
|
$
3.91
|
|
$
0.58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flows from
operating activities
|
$
8,041
|
|
$ 2,359
|
|
|
|
|
|
|
|
|
Free cash
flow
|
$
3,319
|
|
$
547
|
|
|
|
|
|
|
|
|
Revenue
For the year ended December 31, 2016, revenues rose to
$40.0 billion on a pro forma
basis, 7.0% higher than in 2015, driven by continued growth in
Internet, commercial, and video revenues, along with higher
advertising from increased political revenue. On an actual
basis, 2016 revenue grew 197.3% year-over-year, driven primarily by
the Transactions.
Operating Costs and Expenses
Operating costs and expenses totaled $25.6 billion in 2016, an increase of
$1.2 billion, or 4.8% on a pro
forma basis compared to the year-ago period, primarily
reflecting increases in programming costs, other expenses and
transition costs. Transition costs accounted for $156 million and $72
million of total operating costs in 2016 and 2015,
respectively. Excluding transition costs, total operating expenses
increased 4.5% year over year, on a pro forma basis.
On an actual basis, 2016 operating costs and expenses increased
190.0% year-over-year, driven primarily by the Transactions.
Adjusted EBITDA
Pro forma Adjusted EBITDA totaled $14.5 billion for the year ended
December 31, 2016, an increase of 11.2% compared to 2015,
reflecting revenue growth and operating costs and expenses growth
of 7.0% and 4.8%, respectively. Excluding transition-related
expenses, pro forma Adjusted EBITDA grew by 11.8%
year-over-year. On an actual basis, 2016 Adjusted EBITDA grew
211.0% year-over-year, driven primarily by the Transactions.
Net Income Attributable to Charter Shareholders
On a pro forma basis, net income attributable to Charter
shareholders totaled $1.1 billion for
the year ended December 31, 2016, compared to $159 million in 2015. The year-over-year increase
in pro forma net income was primarily related to higher
Adjusted EBITDA. Pro forma net income per basic common share
attributable to Charter shareholders totaled $3.97 for the year ended December 31, 2016,
compared to $0.59 during the same
period last year.
On an actual basis, net income attributable to Charter
shareholders totaled $3.5 billion for
the year ended December 31, 2016, compared to a net loss of
$271 million in 2015. The increase in
net income was driven by the Transactions, including a $3.3 billion tax benefit resulting from a
reduction in Legacy Charter's preexisting valuation allowance on
deferred tax assets and higher income from operations, partly
offset by higher interest expense, also a result of the
Transactions. Actual net income per basic common share attributable
to Charter shareholders totaled $17.05 for the year ended December 31, 2016
compared to a net loss per basic common share of $2.68 during the same period last year. The
increase was driven by the Transactions, partly offset by a 104%
increase in weighted average shares outstanding versus the prior
year period, also a result of the Transactions.
Capital Expenditures
Pro forma capital expenditures totaled $7.5 billion for the year ended December 31,
2016, compared to $7.0 billion
in 2015. The increase was primarily the result of higher spending
on scalable infrastructure, CPE, support and transition related
capital. Transition related capital expenditures accounted for
$460 million and $115 million of capital expenditures in 2016 and
2015, respectively. Excluding transition-related expenses, pro
forma capital expenditures totaled $7.1
billion in 2016 versus in $6.9
billion 2015. Actual capital expenditures totaled
$5.3 billion for the year ended
December 31, 2016.
Cash Flow & Free Cash Flow
In 2016, net cash flows from operating activities totaled
$8.0 billion, compared to
$2.4 billion in 2015. The
year-over-year increase in net cash flows from operating activities
was primarily due to higher Adjusted EBITDA and a working capital
benefit, partly offset by higher cash paid for interest, following
the close of the Transactions.
Free cash flow for the year ended December 31, 2016 was
$3.3 billion, compared to
$547 million during the same period
last year. The increase was primarily due to higher cash flow from
operating activities, partly offset by higher capital expenditures,
following the close of the Transactions.
Liquidity & Financing
As of December 31, 2016, total principal amount of debt was
$60.0 billion and Charter's credit
facilities provided approximately $2.8
billion of additional liquidity in excess of Charter's
$1.5 billion cash position.
In December 2016, Charter
Operating entered into an amendment to its Credit Agreement
decreasing the applicable LIBOR margin on the term loan A, term
loan H, term loan I and revolver to 1.75%, 2.00%, 2.25% and 1.75%,
respectively, eliminating the LIBOR floor on the term loan H and
term loan I and extending the maturity of term loan H to 2022 and
term loan I to 2024.
In January 2017, Charter Operating
entered into an amendment to its Credit Agreement decreasing the
applicable LIBOR margin on both the term loan E and term loan F to
2.00% and eliminating the LIBOR floor.
In February 2017, CCO Holdings and
CCO Holdings Capital Corp. closed on transactions in which they
issued $1.0 billion aggregate
principal amount of 5.125% senior notes due 2027. The net proceeds
will be used to redeem CCO Holdings' 6.625% senior notes due 2022,
pay related fees and expenses and for general corporate
purposes.
Conference Call
Charter will host a conference call on Thursday,
February 16, 2017 at 8:30 a.m. Eastern
Time (ET) related to the contents of this release.
The conference call will be webcast live via the Company's
investor relations website at ir.charter.com. The call will be
archived under the "Financial Information" section two hours after
completion of the call. Participants should go to the webcast link
no later than 10 minutes prior to the start time to register.
Those participating via telephone should dial 866-919-0894 no
later than 10 minutes prior to the call. International participants
should dial 706-679-9379. The conference ID code for the call is
51828946.
A replay of the call will be available at 855-859-2056 or
404-537-3406 beginning two hours after the completion of the call
through the end of business on March 1,
2017. The conference ID code for the replay is 51828946.
Additional Information Available on Website
The information in this press release should be read in
conjunction with the financial statements and footnotes contained
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2016, which will be posted on the "Financial
Information" section of our investor relations website at
ir.charter.com, when it is filed with the Securities and Exchange
Commission (the "SEC"). A slide presentation to accompany the
conference call and a trending schedule containing historical
customer and financial data will also be available in the
"Financial Information" section.
Use of Adjusted EBITDA, Free Cash Flow and Pro Forma
Information
The company uses certain measures that are not defined by U.S.
generally accepted accounting principles ("GAAP") to evaluate
various aspects of its business. Adjusted EBITDA and free cash flow
are non-GAAP financial measures and should be considered in
addition to, not as a substitute for, consolidated net income
(loss) and net cash flows from operating activities reported in
accordance with GAAP. These terms, as defined by Charter, may not
be comparable to similarly titled measures used by other companies.
Adjusted EBITDA and free cash flow are reconciled to consolidated
net income (loss) and net cash flows from operating activities,
respectively, in the Addendum to this release.
Adjusted EBITDA is defined as consolidated net income (loss)
plus net interest expense, income taxes, depreciation and
amortization, stock compensation expense, loss on extinguishment of
debt, (gain) loss on financial instruments, other (income) expense,
net and other operating (income) expenses, such as merger and
restructuring costs, other pension benefits, special charges and
(gain) loss on sale or retirement of assets. As such, it eliminates
the significant non-cash depreciation and amortization expense that
results from the capital-intensive nature of the Company's
businesses as well as other non-cash or special items, and is
unaffected by the Company's capital structure or investment
activities. However, this measure is limited in that it does not
reflect the periodic costs of certain capitalized tangible and
intangible assets used in generating revenues and the cash cost of
financing. These costs are evaluated through other financial
measures.
Free cash flow is defined as net cash flows from operating
activities, less capital expenditures and changes in accrued
expenses related to capital expenditures.
Management and Charter's board of directors use Adjusted EBITDA
and free cash flow to assess Charter's performance and its ability
to service its debt, fund operations and make additional
investments with internally generated funds. In addition, Adjusted
EBITDA generally correlates to the leverage ratio calculation under
the Company's credit facilities or outstanding notes to determine
compliance with the covenants contained in the facilities and notes
(all such documents have been previously filed with the the SEC).
For the purpose of calculating compliance with leverage
covenants, the Company uses Adjusted EBITDA, as presented,
excluding certain expenses paid by its operating subsidiaries to
other Charter entities. The Company's debt covenants refer to these
expenses as management fees, which were $296
million and $91 million for
the three months ended December 31, 2016 and 2015,
respectively, and $930 million and
$322 million for the year ended
December 31, 2016 and 2015, respectively.
Pro forma results give effect to the Transactions
as if they had closed at the beginning of the earliest period
presented and include the operations of Legacy Charter, Legacy TWC
and Legacy Bright House for the full year ended December 31,
2016 and three and twelve months ended December 31, 2015. Due
to the transformative nature of the Transactions, the Company
believes that providing a discussion of its results of operations
on a pro forma basis provides management and investors a
more meaningful perspective on the Company's financial and
operational performance and trends. The results of operations
data on a pro forma basis are provided for illustrative
purposes only and are based on available information and
assumptions that Charter believes are reasonable and do not purport
to represent what the actual consolidated results of operations of
Charter would have been had the Transactions occurred as of the
beginning of the earliest period presented, nor are they
necessarily indicative of future consolidated results of operations
or consolidated financial position. Exhibit 99.1 in the Company's
Quarterly Report on Form 10-Q for the three and nine months ended
September 30, 2016 filed with the SEC
on November 3, 2016 provides pro
forma financial information for each quarter of 2015 and the
first and second quarters of 2016 and a reconciliation of the
pro forma financial information to the actual results of
operations of the Company.
About Charter
Charter (NASDAQ: CHTR) is a leading broadband
communications company and the second largest cable operator
in the United States. Charter
provides a full range of advanced broadband services, including
Spectrum TV™ video entertainment programming, Spectrum Internet™
access, and Spectrum Voice™. Spectrum Business™ similarly provides
scalable, tailored, and cost-effective broadband communications
solutions to business organizations, such as business-to-business
Internet access, data networking, business telephone, video and
music entertainment services, and wireless backhaul. Charter's
advertising sales and production services are sold under the
Spectrum Reach™ brand. More information about Charter can be found
at charter.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This communication includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of
1934, as amended, regarding, among other things, our plans,
strategies and prospects, both business and financial.
Although we believe that our plans, intentions and expectations as
reflected in or suggested by these forward-looking statements are
reasonable, we cannot assure you that we will achieve or realize
these plans, intentions or expectations. Forward-looking
statements are inherently subject to risks, uncertainties and
assumptions including, without limitation, the factors described
under "Risk Factors" from time to time in our filings with the
SEC. Many of the forward-looking statements contained in this
communication may be identified by the use of forward-looking words
such as "believe," "expect," "anticipate," "should," "planned,"
"will," "may," "intend," "estimated," "aim," "on track," "target,"
"opportunity," "tentative," "positioning," "designed," "create,"
"predict," "project," "initiatives," "seek," "would," "could,"
"continue," "ongoing," "upside," "increases" and "potential," among
others. Important factors that could cause actual results to
differ materially from the forward-looking statements we make in
this communication are set forth in our annual report on Form 10-K,
and in other reports or documents that we file from time to time
with the SEC, and include, but are not limited to:
Risks Related to the Recently Completed Transactions:
- our ability to promptly, efficiently and effectively integrate
acquired operations;
- managing a significantly larger company than before the
completion of the Transactions;
- our ability to achieve the synergies and value creation
contemplated by the Transactions;
- changes in Legacy Charter, Legacy TWC or Legacy Bright House
operations' businesses, future cash requirements, capital
requirements, results of operations, revenues, financial condition
and/or cash flows;
- disruption in our business relationships as a result of the
Transactions;
- the increase in indebtedness as a result of the Transactions,
which will increase interest expense and may decrease our operating
flexibility;
- operating costs and business disruption that may be greater
than expected;
- the ability to retain and hire key personnel; and
- costs, disruptions and possible limitations on operating
flexibility related to, and our ability to comply with, regulatory
conditions applicable to us as a result of the Transactions.
Risks Related to Our Business
- our ability to sustain and grow revenues and cash flow from
operations by offering video, Internet, voice, advertising and
other services to residential and commercial customers, to
adequately meet the customer experience demands in our markets and
to maintain and grow our customer base, particularly in the face of
increasingly aggressive competition, the need for innovation and
the related capital expenditures;
- the impact of competition from other market participants,
including but not limited to incumbent telephone companies, direct
broadcast satellite operators, wireless broadband and telephone
providers, digital subscriber line ("DSL") providers, fiber to the
home providers, video provided over the Internet by (i) market
participants that have not historically competed in the
multichannel video business, (ii) traditional multichannel video
distributors, and (iii) content providers that have historically
licensed cable networks to multichannel video distributors, and
providers of advertising over the Internet;
- general business conditions, economic uncertainty or downturn,
unemployment levels and the level of activity in the housing
sector;
- our ability to obtain programming at reasonable prices or to
raise prices to offset, in whole or in part, the effects of higher
programming costs (including retransmission consents);
- our ability to develop and deploy new products and technologies
including our cloud-based user interface, Spectrum
Guide®, and downloadable security for set-top boxes, and
any other cloud-based consumer services and service platforms;
- the effects of governmental regulation on our business or
potential business combination transactions;
- any events that disrupt our networks, information systems or
properties and impair our operating activities or our
reputation;
- the availability and access, in general, of funds to meet our
debt obligations prior to or when they become due and to fund our
operations and necessary capital expenditures, either through (i)
cash on hand, (ii) free cash flow, or (iii) access to the capital
or credit markets; and
- our ability to comply with all covenants in our indentures and
credit facilities, any violation of which, if not cured in a timely
manner, could trigger a default of our other obligations under
cross-default provisions.
All forward-looking statements attributable to us or any person
acting on our behalf are expressly qualified in their entirety by
this cautionary statement. We are under no duty or obligation
to update any of the forward-looking statements after the date of
this communication.
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
(dollars in
millions, except per share data)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
Actual
|
|
Actual
|
|
%
Change
|
|
Actual
|
|
Actual
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$
4,098
|
|
$
1,167
|
|
251.2 %
|
|
$
11,967
|
|
$
4,587
|
|
160.9 %
|
Internet
|
3,312
|
|
781
|
|
324.2 %
|
|
9,272
|
|
3,003
|
|
208.7 %
|
Voice
|
719
|
|
135
|
|
431.6 %
|
|
2,005
|
|
539
|
|
272.2 %
|
Residential
revenue
|
8,129
|
|
2,083
|
|
290.3 %
|
|
23,244
|
|
8,129
|
|
185.9 %
|
Small and medium
business
|
891
|
|
199
|
|
348.7 %
|
|
2,480
|
|
764
|
|
224.7 %
|
Enterprise
|
526
|
|
95
|
|
451.5 %
|
|
1,429
|
|
363
|
|
293.0 %
|
Commercial
revenue
|
1,417
|
|
294
|
|
382.1 %
|
|
3,909
|
|
1,127
|
|
246.7 %
|
Advertising
sales
|
506
|
|
87
|
|
482.9 %
|
|
1,235
|
|
309
|
|
300.3 %
|
Other
|
223
|
|
48
|
|
362.4 %
|
|
615
|
|
189
|
|
225.0 %
|
Total
Revenue
|
10,275
|
|
2,512
|
|
309.0 %
|
|
29,003
|
|
9,754
|
|
197.3 %
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Programming
|
2,386
|
|
674
|
|
254.0 %
|
|
7,034
|
|
2,678
|
|
162.6 %
|
Regulatory,
connectivity and produced content
|
523
|
|
111
|
|
370.7 %
|
|
1,467
|
|
435
|
|
237.0 %
|
Costs to service
customers
|
1,832
|
|
420
|
|
335.6 %
|
|
5,173
|
|
1,705
|
|
203.4 %
|
Marketing
|
559
|
|
154
|
|
263.0 %
|
|
1,699
|
|
628
|
|
170.4 %
|
Transition
costs
|
78
|
|
22
|
|
261.2 %
|
|
156
|
|
72
|
|
117.9 %
|
Other
expense
|
1,044
|
|
223
|
|
369.4 %
|
|
2,882
|
|
830
|
|
247.1 %
|
Total operating costs
and expenses (exclusive of items shown separately below)
|
6,422
|
|
1,604
|
|
300.4 %
|
|
18,411
|
|
6,348
|
|
190.0 %
|
Adjusted
EBITDA
|
3,853
|
|
908
|
|
324.3 %
|
|
10,592
|
|
3,406
|
|
211.0 %
|
Adjusted EBITDA
margin
|
37.5
%
|
|
36.2
%
|
|
|
|
36.5
%
|
|
34.9
%
|
|
|
Depreciation and
amortization
|
2,495
|
|
545
|
|
|
|
6,907
|
|
2,125
|
|
|
Stock compensation
expense
|
76
|
|
20
|
|
|
|
244
|
|
78
|
|
|
Other operating
(income) expenses, net
|
(157)
|
|
20
|
|
|
|
86
|
|
89
|
|
|
Income from
operations
|
1,439
|
|
323
|
|
|
|
3,355
|
|
1,114
|
|
|
OTHER
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(728)
|
|
(435)
|
|
|
|
(2,499)
|
|
(1,306)
|
|
|
Loss on
extinguishment of debt
|
(1)
|
|
—
|
|
|
|
(111)
|
|
(128)
|
|
|
Gain (loss) on
financial instruments, net
|
73
|
|
6
|
|
|
|
89
|
|
(4)
|
|
|
Other expense,
net
|
(4)
|
|
(4)
|
|
|
|
(14)
|
|
(7)
|
|
|
|
(660)
|
|
(433)
|
|
|
|
(2,535)
|
|
(1,445)
|
|
|
Income (loss) before
income taxes
|
779
|
|
(110)
|
|
|
|
820
|
|
(331)
|
|
|
Income tax benefit
(expense)
|
(210)
|
|
(12)
|
|
|
|
2,925
|
|
60
|
|
|
Consolidated net
income (loss)
|
569
|
|
(122)
|
|
|
|
3,745
|
|
(271)
|
|
|
Less: Net income
attributable to noncontrolling interests
|
(115)
|
|
—
|
|
|
|
(223)
|
|
—
|
|
|
Net income (loss)
attributable to Charter shareholders
|
$
454
|
|
$
(122)
|
|
|
|
$
3,522
|
|
$
(271)
|
|
|
EARNINGS (LOSS) PER
COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
1.69
|
|
$
(1.21)
|
|
|
|
$
17.05
|
|
$
(2.68)
|
|
|
Diluted
|
$
1.67
|
|
$
(1.21)
|
|
|
|
$
15.94
|
|
$
(2.68)
|
|
|
Weighted average
common shares outstanding, basic
|
268,584,368
|
|
101,366,476
|
|
|
|
206,539,100
|
|
101,152,647
|
|
|
Weighted average
common shares outstanding, diluted
|
272,624,270
|
|
101,366,476
|
|
|
|
234,791,439
|
|
101,152,647
|
|
|
|
Adjusted EBITDA is a
non-GAAP term. See page 7 of this addendum for the
reconciliation of Adjusted EBITDA to consolidated net income (loss)
as defined by GAAP. All percentages are calculated using
whole numbers. Minor differences may exist due to
rounding.
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND OPERATING
DATA
|
(dollars in
millions, except per share data)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
|
|
2016
|
|
2015
|
|
|
|
Actual
|
|
Pro
Forma
|
|
%
Change
|
|
Pro
Forma
|
|
Pro
Forma
|
|
%
Change
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
Video
|
$
4,098
|
|
$
4,020
|
|
1.9 %
|
|
$
16,390
|
|
$
16,029
|
|
2.3 %
|
Internet
|
3,312
|
|
2,924
|
|
13.3 %
|
|
12,688
|
|
11,295
|
|
12.3 %
|
Voice
|
719
|
|
722
|
|
(0.5)%
|
|
2,905
|
|
2,842
|
|
2.2 %
|
Residential
revenue
|
8,129
|
|
7,666
|
|
6.0 %
|
|
31,983
|
|
30,166
|
|
6.0 %
|
Small and medium
business
|
891
|
|
789
|
|
13.0 %
|
|
3,409
|
|
3,009
|
|
13.3 %
|
Enterprise
|
526
|
|
479
|
|
9.8 %
|
|
2,025
|
|
1,818
|
|
11.4 %
|
Commercial
revenue
|
1,417
|
|
1,268
|
|
11.8 %
|
|
5,434
|
|
4,827
|
|
12.6 %
|
Advertising
sales
|
506
|
|
419
|
|
20.8 %
|
|
1,696
|
|
1,524
|
|
11.3 %
|
Other
|
223
|
|
228
|
|
(2.2)%
|
|
910
|
|
877
|
|
4.0 %
|
Total
Revenue
|
10,275
|
|
9,581
|
|
7.2 %
|
|
40,023
|
|
37,394
|
|
7.0 %
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Programming
|
2,386
|
|
2,249
|
|
6.1 %
|
|
9,614
|
|
8,953
|
|
7.4 %
|
Regulatory,
connectivity and produced content
|
523
|
|
505
|
|
3.7 %
|
|
2,093
|
|
2,065
|
|
1.4 %
|
Costs to service
customers
|
1,832
|
|
1,813
|
|
1.0 %
|
|
7,292
|
|
7,216
|
|
1.0 %
|
Marketing
|
559
|
|
591
|
|
(5.5)%
|
|
2,359
|
|
2,306
|
|
2.3 %
|
Transition
costs
|
78
|
|
22
|
|
261.2 %
|
|
156
|
|
72
|
|
117.9 %
|
Other
expense
|
1,044
|
|
983
|
|
6.1 %
|
|
4,045
|
|
3,778
|
|
7.0 %
|
Total operating costs
and expenses (exclusive of items shown separately below)
|
6,422
|
|
6,163
|
|
4.2 %
|
|
25,559
|
|
24,390
|
|
4.8 %
|
Adjusted
EBITDA
|
3,853
|
|
3,418
|
|
12.7 %
|
|
14,464
|
|
13,004
|
|
11.2 %
|
Adjusted EBITDA
margin
|
37.5
%
|
|
35.7
%
|
|
|
|
36.1
%
|
|
34.8
%
|
|
|
Depreciation and
amortization
|
2,495
|
|
2,387
|
|
|
|
9,555
|
|
9,348
|
|
|
Stock compensation
expense
|
76
|
|
62
|
|
|
|
295
|
|
246
|
|
|
Other operating
(income) expenses, net
|
(157)
|
|
1
|
|
|
|
(187)
|
|
14
|
|
|
Income from
operations
|
1,439
|
|
968
|
|
|
|
4,801
|
|
3,396
|
|
|
OTHER
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
(728)
|
|
(698)
|
|
|
|
(2,883)
|
|
(2,968)
|
|
|
Loss on
extinguishment of debt
|
(1)
|
|
—
|
|
|
|
(111)
|
|
(128)
|
|
|
Gain (loss) on
financial instruments, net
|
73
|
|
6
|
|
|
|
89
|
|
(4)
|
|
|
Other income
(expense), net
|
(4)
|
|
(1)
|
|
|
|
1
|
|
144
|
|
|
|
(660)
|
|
(693)
|
|
|
|
(2,904)
|
|
(2,956)
|
|
|
Income before income
taxes
|
779
|
|
275
|
|
|
|
1,897
|
|
440
|
|
|
Income tax
expense
|
(210)
|
|
(83)
|
|
|
|
(498)
|
|
(102)
|
|
|
Consolidated net
income
|
569
|
|
192
|
|
|
|
1,399
|
|
338
|
|
|
Less: Net income
attributable to noncontrolling interests
|
(115)
|
|
(62)
|
|
|
|
(329)
|
|
(179)
|
|
|
Net income
attributable to Charter shareholders
|
$
454
|
|
$
130
|
|
|
|
$
1,070
|
|
$
159
|
|
|
EARNINGS PER COMMON
SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
1.69
|
|
$
0.48
|
|
|
|
$
3.97
|
|
$
0.59
|
|
|
Diluted
|
$
1.67
|
|
$
0.48
|
|
|
|
$
3.91
|
|
$
0.58
|
|
|
Weighted average
common shares outstanding, basic
|
268,584,368
|
|
269,966,681
|
|
|
|
269,838,374
|
|
269,730,197
|
|
|
Weighted average
common shares outstanding, diluted
|
272,624,270
|
|
273,363,706
|
|
|
|
273,722,472
|
|
273,129,471
|
|
|
|
Pro forma results
reflect certain acquisitions of cable systems in 2016 as if they
occurred as of the earliest period presented. Adjusted EBITDA
is a non-GAAP term. See page 7 of this addendum for the
reconciliation of Adjusted EBITDA to consolidated net income as
defined by GAAP. All percentages are calculated using whole
numbers. Minor differences may exist due to rounding.
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(dollars in
millions)
|
|
|
December
31,
|
|
2016
|
|
2015
|
|
|
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
1,535
|
|
$
5
|
Accounts receivable,
net
|
1,432
|
|
279
|
Prepaid expenses and
other current assets
|
333
|
|
61
|
Total current
assets
|
3,300
|
|
345
|
|
|
|
|
RESTRICTED CASH AND
CASH EQUIVALENTS
|
—
|
|
22,264
|
|
|
|
|
INVESTMENT IN CABLE
PROPERTIES:
|
|
|
|
Property, plant and
equipment, net
|
32,963
|
|
8,345
|
Customer
relationships, net
|
14,608
|
|
856
|
Franchises
|
67,316
|
|
6,006
|
Goodwill
|
29,509
|
|
1,168
|
Total investment in
cable properties, net
|
144,396
|
|
16,375
|
|
|
|
|
OTHER NONCURRENT
ASSETS
|
1,371
|
|
332
|
|
|
|
|
Total
assets
|
$ 149,067
|
|
$ 39,316
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY (DEFICIT)
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
7,544
|
|
$
1,972
|
Current portion of
long-term debt
|
2,028
|
|
—
|
Total current
liabilities
|
9,572
|
|
1,972
|
|
|
|
|
LONG-TERM
DEBT
|
59,719
|
|
35,723
|
DEFERRED INCOME
TAXES
|
26,665
|
|
1,590
|
OTHER LONG-TERM
LIABILITIES
|
2,745
|
|
77
|
|
|
|
|
SHAREHOLDERS' EQUITY
(DEFICIT):
|
|
|
|
Controlling
interest
|
40,139
|
|
(46)
|
Noncontrolling
interests
|
10,227
|
|
—
|
Total shareholders'
equity (deficit)
|
50,366
|
|
(46)
|
|
|
|
|
Total liabilities and
shareholders' equity (deficit)
|
$ 149,067
|
|
$ 39,316
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(dollars in
millions)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Consolidated net
income (loss)
|
$
569
|
|
$
(122)
|
|
$
3,745
|
|
$
(271)
|
Adjustments to
reconcile consolidated net income (loss) to net cash flows from
operating activities:
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,495
|
|
545
|
|
6,907
|
|
2,125
|
Stock compensation
expense
|
76
|
|
20
|
|
244
|
|
78
|
Accelerated vesting
of equity awards
|
46
|
|
—
|
|
248
|
|
—
|
Noncash interest
(income) expense, net
|
(108)
|
|
7
|
|
(256)
|
|
28
|
Other pension
benefits
|
(366)
|
|
—
|
|
(899)
|
|
—
|
Loss on
extinguishment of debt
|
1
|
|
—
|
|
111
|
|
128
|
(Gain) loss on
financial instruments, net
|
(73)
|
|
(6)
|
|
(89)
|
|
4
|
Deferred income
taxes
|
212
|
|
11
|
|
(2,958)
|
|
(65)
|
Other, net
|
8
|
|
3
|
|
8
|
|
11
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(158)
|
|
12
|
|
(160)
|
|
5
|
Prepaid expenses and
other assets
|
26
|
|
16
|
|
111
|
|
(3)
|
Accounts payable,
accrued liabilities and other
|
498
|
|
125
|
|
1,029
|
|
319
|
Net cash flows from
operating activities
|
3,226
|
|
611
|
|
8,041
|
|
2,359
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
(1,888)
|
|
(548)
|
|
(5,325)
|
|
(1,840)
|
Change in accrued
expenses related to capital expenditures
|
517
|
|
17
|
|
603
|
|
28
|
Purchases of cable
systems, net of cash acquired
|
—
|
|
—
|
|
(28,810)
|
|
—
|
Change in restricted
cash and cash equivalents
|
—
|
|
(2,638)
|
|
22,264
|
|
(15,153)
|
Other, net
|
(14)
|
|
2
|
|
(22)
|
|
(67)
|
Net cash flows from
investing activities
|
(1,385)
|
|
(3,167)
|
|
(11,290)
|
|
(17,032)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Borrowings of
long-term debt
|
6,347
|
|
2,983
|
|
12,344
|
|
26,045
|
Repayments of
long-term debt
|
(6,401)
|
|
(415)
|
|
(10,521)
|
|
(11,326)
|
Payments for debt
issuance costs
|
(1)
|
|
(1)
|
|
(284)
|
|
(36)
|
Issuance of
equity
|
—
|
|
—
|
|
5,000
|
|
—
|
Purchase of treasury
stock
|
(1,114)
|
|
(14)
|
|
(1,562)
|
|
(38)
|
Proceeds from
exercise of stock options
|
15
|
|
8
|
|
86
|
|
30
|
Settlement of
restricted stock units
|
(59)
|
|
—
|
|
(59)
|
|
—
|
Purchase of
noncontrolling interest
|
(218)
|
|
—
|
|
(218)
|
|
—
|
Distributions to
noncontrolling interest
|
(41)
|
|
—
|
|
(96)
|
|
—
|
Proceeds from
termination of interest rate derivatives
|
—
|
|
—
|
|
88
|
|
—
|
Other, net
|
1
|
|
—
|
|
1
|
|
—
|
Net cash flows from
financing activities
|
(1,471)
|
|
2,561
|
|
4,779
|
|
14,675
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH
AND CASH EQUIVALENTS
|
370
|
|
5
|
|
1,530
|
|
2
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
1,165
|
|
—
|
|
5
|
|
3
|
CASH AND CASH
EQUIVALENTS, end of period
|
$ 1,535
|
|
$
5
|
|
$
1,535
|
|
$
5
|
|
|
|
|
|
|
|
|
CASH PAID FOR
INTEREST
|
$
721
|
|
$
314
|
|
$
2,685
|
|
$
1,064
|
CASH PAID FOR
TAXES
|
$
9
|
|
$
—
|
|
$
63
|
|
$
3
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED SUMMARY
OF OPERATING STATISTICS
|
(in thousands,
except per customer and penetration data)
|
|
|
Approximate as
of
|
|
Actual
|
|
Pro
Forma
|
|
December 31,
2016 (a)
|
|
September 30,
2016 (a)
|
|
December 31,
2015 (a)
|
Footprint
(b)
|
|
|
|
|
|
Estimated Video
Passings
|
49,229
|
|
49,001
|
|
48,375
|
Estimated Internet
Passings
|
48,955
|
|
48,689
|
|
48,019
|
Estimated Voice
Passings
|
48,142
|
|
47,854
|
|
47,164
|
|
|
|
|
|
|
Penetration
Statistics (c)
|
|
|
|
|
|
Video Penetration of
Estimated Video Passings
|
35.0 %
|
|
35.3 %
|
|
36.0 %
|
Internet Penetration
of Estimated Internet Passings
|
46.2 %
|
|
45.6 %
|
|
43.7 %
|
Voice Penetration of
Estimated Voice Passings
|
23.1 %
|
|
23.1 %
|
|
22.5 %
|
|
|
|
|
|
|
Customer
Relationships (d)
|
|
|
|
|
|
Residential
|
24,801
|
|
24,551
|
|
23,795
|
Small and Medium
Business
|
1,404
|
|
1,367
|
|
1,256
|
Total Customer
Relationships
|
26,205
|
|
25,918
|
|
25,051
|
|
|
|
|
|
|
Residential
|
|
|
|
|
|
Primary Service
Units ("PSUs")
|
|
|
|
|
|
Video
|
16,836
|
|
16,887
|
|
17,062
|
Internet
|
21,374
|
|
21,017
|
|
19,911
|
Voice
|
10,327
|
|
10,288
|
|
9,959
|
|
48,537
|
|
48,192
|
|
46,932
|
|
|
|
|
|
|
Pro Forma
Quarterly Net Additions/(Losses)
|
|
|
|
|
|
Video
|
(51)
|
|
(47)
|
|
118
|
Internet
|
357
|
|
350
|
|
495
|
Voice
|
39
|
|
33
|
|
304
|
|
345
|
|
336
|
|
917
|
|
|
|
|
|
|
Single Play
(e)
|
9,640
|
|
9,447
|
|
8,883
|
Double Play
(e)
|
6,586
|
|
6,569
|
|
6,687
|
Triple Play
(e)
|
8,575
|
|
8,535
|
|
8,225
|
|
|
|
|
|
|
Single Play
Penetration (f)
|
38.9 %
|
|
38.5 %
|
|
37.3 %
|
Double Play
Penetration (f)
|
26.6 %
|
|
26.8 %
|
|
28.1 %
|
Triple Play
Penetration (f)
|
34.6 %
|
|
34.8 %
|
|
34.6 %
|
|
|
|
|
|
|
% Residential
Non-Video Customer Relationships
|
32.1 %
|
|
31.2 %
|
|
28.3 %
|
|
|
|
|
|
|
Pro Forma Monthly
Residential Revenue per Residential Customer (g)
|
$
109.77
|
|
$
109.70
|
|
$
108.22
|
|
|
|
|
|
|
Small and Medium
Business
|
|
|
|
|
|
PSUs
|
|
|
|
|
|
Video
|
400
|
|
388
|
|
361
|
Internet
|
1,219
|
|
1,185
|
|
1,078
|
Voice
|
778
|
|
751
|
|
667
|
|
2,397
|
|
2,324
|
|
2,106
|
|
|
|
|
|
|
Pro Forma
Quarterly Net Additions/(Losses)
|
|
|
|
|
|
Video
|
12
|
|
10
|
|
7
|
Internet
|
34
|
|
37
|
|
33
|
Voice
|
27
|
|
26
|
|
24
|
|
73
|
|
73
|
|
64
|
|
|
|
|
|
|
Pro Forma Monthly
Small and Medium Business Revenue per Customer (h)
|
$
214.25
|
|
$
214.53
|
|
$
212.26
|
|
|
|
|
|
|
Enterprise PSUs
(i)
|
|
|
|
|
|
Enterprise
PSUs
|
97
|
|
93
|
|
81
|
|
Pro forma results
reflect certain acquisitions of cable systems in 2016 as if they
occurred at the beginning of the earliest period presented.
All percentages are calculated using whole numbers. Minor
differences may exist due to rounding. See footnotes to
unaudited summary of operating statistics on page 6 of this
addendum.
|
|
(a)
|
All customer
statistics include the operations of Legacy TWC, Legacy Bright
House and Legacy Charter each of which is based on individual
legacy company reporting methodology. These methodologies
differ and their differences may be material and statistical
reporting will be conformed over time to a single Charter reporting
methodology.
|
|
|
|
At December 31, 2015,
actual residential and small and medium business customer
relationships were 6,284,000 and 390,000, respectively; actual
residential video, Internet and voice PSUs were 4,322,000,
5,227,000 and 2,598,000, respectively; actual small and medium
business video, Internet and voice PSUs were 108,000, 345,000 and
218,000, respectively; Enterprise PSUs were 30,000.
|
|
|
|
We calculate the
aging of customer accounts based on the monthly billing cycle for
each account. On that basis, at December 31, 2016, September
30, 2016 and December 31, 2015, actual customers include
approximately 208,400, 200,900 and 38,100 customers, respectively,
whose accounts were over 60 days past due, approximately 15,500,
15,200 and 1,700 customers, respectively, whose accounts were over
90 days past due and approximately 8,000, 8,900 and 900 customers,
respectively, whose accounts were over 120 days past
due.
|
|
|
(b)
|
Passings represent
our estimate of the number of units, such as single family homes,
apartment and condominium units and small and medium business and
enterprise sites passed by our cable distribution network in the
areas where we offer the service indicated. These estimates
are based upon the information available at this time and are
updated for all periods presented when new information becomes
available.
|
|
|
(c)
|
Penetration
represents residential and small and medium business customers as a
percentage of estimated passings for the service
indicated.
|
|
|
(d)
|
Customer
relationships include the number of customers that receive one or
more levels of service, encompassing video, Internet and voice
services, without regard to which service(s) such customers
receive. Customers who reside in residential multiple
dwelling units ("MDUs") and that are billed under bulk contracts
are counted based on the number of billed units within each bulk
MDU. Total customer relationships excludes enterprise
customer relationships.
|
|
|
(e)
|
Single play, double
play and triple play customers represent customers that subscribe
to one, two or three of Charter service offerings,
respectively.
|
|
|
(f)
|
Single play, double
play and triple play penetration represents the number of
residential single play, double play and triple play customers,
respectively, as a percentage of residential customer
relationships.
|
|
|
(g)
|
Pro forma monthly
residential revenue per residential customer is calculated as total
pro forma residential video, Internet and voice quarterly revenue
divided by three divided by average pro forma residential customer
relationships during the respective quarter.
|
|
|
(h)
|
Pro forma monthly
small and medium business revenue per customer is calculated as
total pro forma small and medium business quarterly revenue divided
by three divided by average pro forma small and medium business
customer relationships during the respective quarter.
|
|
|
(i)
|
Enterprise PSUs
represents the aggregate number of fiber service offerings counting
each separate service offering at each customer location as an
individual PSU.
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED
RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES
|
(dollars in
millions)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
|
|
|
|
|
|
|
Consolidated net
income (loss)
|
$
569
|
|
$
(122)
|
|
$
3,745
|
|
$
(271)
|
Plus: Interest expense,
net
|
728
|
|
435
|
|
2,499
|
|
1,306
|
Income tax
(benefit) expense
|
210
|
|
12
|
|
(2,925)
|
|
(60)
|
Depreciation and
amortization
|
2,495
|
|
545
|
|
6,907
|
|
2,125
|
Stock
compensation expense
|
76
|
|
20
|
|
244
|
|
78
|
Loss on
extinguishment of debt
|
1
|
|
—
|
|
111
|
|
128
|
(Gain) loss on
financial instruments, net
|
(73)
|
|
(6)
|
|
(89)
|
|
4
|
Other,
net
|
(153)
|
|
24
|
|
100
|
|
96
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(a)
|
3,853
|
|
908
|
|
10,592
|
|
3,406
|
Less:
Purchases of property, plant and equipment
|
(1,888)
|
|
(548)
|
|
(5,325)
|
|
(1,840)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA less
capital expenditures
|
$ 1,965
|
|
$
360
|
|
$
5,267
|
|
$
1,566
|
|
|
|
|
|
|
|
|
Net cash flows from
operating activities
|
$ 3,226
|
|
$
611
|
|
$
8,041
|
|
$
2,359
|
Less:
Purchases of property, plant and equipment
|
(1,888)
|
|
(548)
|
|
(5,325)
|
|
(1,840)
|
Change in
accrued expenses related to capital expenditures
|
517
|
|
17
|
|
603
|
|
28
|
|
|
|
|
|
|
|
|
Free cash
flow
|
$ 1,855
|
|
$
80
|
|
$
3,319
|
|
$
547
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Actual
|
|
Pro Forma
(b)
|
|
Pro Forma
(b)
|
|
Pro Forma
(b)
|
|
|
|
|
|
|
|
|
Consolidated net
income
|
$
569
|
|
$
192
|
|
$
1,399
|
|
$
338
|
Plus: Interest expense,
net
|
728
|
|
698
|
|
2,883
|
|
2,968
|
Income tax
expense
|
210
|
|
83
|
|
498
|
|
102
|
Depreciation and
amortization
|
2,495
|
|
2,387
|
|
9,555
|
|
9,348
|
Stock
compensation expense
|
76
|
|
62
|
|
295
|
|
246
|
Loss on
extinguishment of debt
|
1
|
|
—
|
|
111
|
|
128
|
(Gain) loss on
financial instruments, net
|
(73)
|
|
(6)
|
|
(89)
|
|
4
|
Other,
net
|
(153)
|
|
2
|
|
(188)
|
|
(130)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(a)
|
3,853
|
|
3,418
|
|
14,464
|
|
13,004
|
Less:
Purchases of property, plant and equipment
|
(1,888)
|
|
(1,831)
|
|
(7,545)
|
|
(6,969)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA less
capital expenditures
|
$ 1,965
|
|
$
1,587
|
|
$
6,919
|
|
$
6,035
|
|
|
(a)
|
See page 1 and 2 of
this addendum for detail of the components included within Adjusted
EBITDA.
|
(b)
|
Pro forma results
reflect certain acquisitions of cable systems in 2016 as if they
occurred as of the earliest period presented.
|
|
The above schedules
are presented in order to reconcile Adjusted EBITDA and free cash
flows, both non-GAAP measures, to the most directly comparable GAAP
measures in accordance with Section 401(b) of the Sarbanes-Oxley
Act.
|
CHARTER
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
UNAUDITED CAPITAL
EXPENDITURES
|
(dollars in
millions)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
|
|
|
|
|
|
|
Customer premise
equipment (a)
|
$
687
|
|
$
134
|
|
$
1,864
|
|
$
582
|
Scalable
infrastructure (b)
|
453
|
|
188
|
|
1,390
|
|
523
|
Line extensions
(c)
|
254
|
|
50
|
|
721
|
|
194
|
Upgrade/Rebuild
(d)
|
149
|
|
34
|
|
456
|
|
128
|
Support capital
(e)
|
345
|
|
142
|
|
894
|
|
413
|
|
|
|
|
|
|
|
|
Total
capital expenditures
|
$ 1,888
|
|
$
548
|
|
$
5,325
|
|
$
1,840
|
|
|
|
|
|
|
|
|
Capital expenditures
included in total related to:
|
|
|
|
|
|
|
|
Commercial services
|
$
258
|
|
$
74
|
|
$
824
|
|
$
260
|
Transition (f)
|
$
187
|
|
$
49
|
|
$
460
|
|
$
115
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Actual
|
|
Pro Forma
(g)
|
|
Pro Forma
(g)
|
|
Pro Forma
(g)
|
|
|
|
|
|
|
|
|
Customer premise
equipment (a)
|
$
687
|
|
$
553
|
|
$
2,761
|
|
$
2,650
|
Scalable
infrastructure (b)
|
453
|
|
514
|
|
2,009
|
|
1,702
|
Line extensions
(c)
|
254
|
|
252
|
|
1,005
|
|
977
|
Upgrade/Rebuild
(d)
|
149
|
|
156
|
|
610
|
|
594
|
Support capital
(e)
|
345
|
|
356
|
|
1,160
|
|
1,046
|
|
|
|
|
|
|
|
|
Total
capital expenditures
|
$ 1,888
|
|
$
1,831
|
|
$
7,545
|
|
$
6,969
|
|
|
(a)
|
Customer premise
equipment includes costs incurred at the customer residence to
secure new customers and revenue generating units, including
customer installation costs and customer premise equipment (e.g.,
set-top boxes and cable modems).
|
(b)
|
Scalable
infrastructure includes costs, not related to customer premise
equipment, to secure growth of new customers and revenue generating
units, or provide service enhancements (e.g., headend
equipment).
|
(c)
|
Line extensions
include network costs associated with entering new service areas
(e.g., fiber/coaxial cable, amplifiers, electronic equipment,
make-ready and design engineering).
|
(d)
|
Upgrade/rebuild
includes costs to modify or replace existing fiber/coaxial cable
networks, including betterments.
|
(e)
|
Support capital
includes costs associated with the replacement or enhancement of
non-network assets due to technological and physical obsolescence
(e.g., non-network equipment, land, buildings and
vehicles).
|
(f)
|
Transition represents
incremental costs incurred to integrate the Legacy TWC and Legacy
Bright House operations and to bring the three companies' systems
and processes into a uniform operating structure.
|
(g)
|
Pro forma results
reflect certain acquisitions of cable systems in 2016 as if they
occurred as of the earliest period presented.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/charter-announces-fourth-quarter-and-full-year-2016-results-300408739.html
SOURCE Charter Communications, Inc.